"One earnings miss, guidance revision, or customer decision is all that it will take. You missed Nvidia. You missed Broadcom. And now, you are looking at AppLovin (APP)-the stock that is up over 75% this year-and asking yourself: "Is this the next one?" The chart shows a steep upward trajectory. The headlines scream "AI AdTech Revolution." The valuation has ballooned to about $200 Billion."
"Here is the breakdown of why this might be among the most dangerous stocks in the NASDAQ. 1. The "Whale" Hunt: Who is Actually Paying Them? To understand the bubble, you have to understand the customer. When you buy Google, you are betting on everyone (from your local pizza shop to Coca-Cola). When you buy AppLovin, you are betting on two very specific, high-risk groups."
"The "Whales" (Mobile Games): Who they are: The developers behind addictive games like Candy Crush, Royal Match, or Coin Master. The Dynamic: These companies live and die by "User Acquisition." They pay AppLovin to find people willing to spend $50 on virtual gems. The "Casino" Connection: AppLovin doesn't just show ads; it finds the gamblers. Its algorithm knows exactly when a player is stuck on a level and is desperate enough to download a new game or watch an ad."
AppLovin's market value has surged to roughly $200 billion amid AI adtech headlines and a more than 75% stock gain this year. The revenue base is concentrated in two risky customer types: mobile game developers who pay for aggressive user acquisition and e-commerce arbitrageurs seeking cheap traffic after Meta became expensive. AppLovin's algorithm targets high-spend or desperate users like gamblers and users stuck on game levels, effectively functioning as a casino optimization tool. That concentration and reliance on fragile demand make the business vulnerable to earnings misses, guidance cuts, or abrupt customer behavior changes.
Read at Forbes
Unable to calculate read time
Collection
[
|
...
]